Category Archives: Student Debt

The Education Department “does not have a comprehensive plan or strategy to prevent student-loan defaults,” an audit conducted by the department’s Office of Inspector General has concluded.

A report on the audit’s findings, released on Friday, argues that the department’s lack of a coherent strategy renders it ill equipped to find effective measures against default, identify risks that cause loan delinquency, and work effectively with companies that service student loans on the department’s beha…

A group of Democratic U.S. senators wants the Education Department to discharge the federal loans of students who have legal claims against Corinthian Colleges, a defunct for-profit education provider. The students include those covered under lawsuits brought by the attorneys general of Massachusetts and California.

In a letter sent on Tuesday, the 13 senators argue that “students should not literally be stuck paying the price” when colleges “fail to hold up their end of the bargain.”

Two senior Democratic lawmakers sent a letter on Tuesday to the education secretary, Arne Duncan, criticizing changes the Education Department has made in how it calculates cohort default rates on student loans. Sen. Tom Harkin of Iowa and Rep. George Miller of California took the department to task for exempting from penalties some colleges with default rates of 30 percent or more.

“With few exceptions, any institution or program where students consistently default over the 30% threshold should…

Higher education is one of the “cornerstones” of economic opportunity, Janet L. Yellen, chair of the Federal Reserve Board, said on Friday in an unusual and closely watched speech about growing inequality. But her remarks, given at the Federal Reserve Bank of Boston, did not cast higher education’s role in an entirely favorable light.

The earnings premium of a college degree has grown, Ms. Yellen said in her prepared remarks, and the “net returns for a degree are high enough that college still o…

The percentage of borrowers who defaulted on their student loans in the past three years has dropped across all higher-education sectors, according to data released on Wednesday by the U.S. Education Department. The overall default rate for borrowers who began repayment between October 1, 2010, and September 30, 2011, fell to 13.7 percent from the previous year’s 14.7 percent.

Here’s a snapshot of the rates by sector over time, with the new data in the last of the three columns:

The U.S. Department of Education is scheduled to release this week its annual cohort default rates, which describe what percentage of borrowers are defaulting on their student loans. The data were due to be released to colleges on Monday and to the public in the middle of the week. Here’s what you need to know:

What’s new this year?

There is one big change. This is the first year colleges will be judged on a three-year default rate, measuring whether borrowers who began repaying their loans betw…

Black college graduates take on significantly more student debt than do their white counterparts, according to a new study by Gallup.

The study, conducted with Purdue University and the Lumina Foundation, found that half of black students who graduated from 2000 to 2014 reported graduating with more than $25,000 in debt, compared with 34 percent of white graduates who reported that level of debt. According to the study, the gap has remained roughly the same during the past four decades.

The U.S. Department of Education announced plans on Tuesday to establish a negotiated rule-making panel charged with hashing out how to expand the income-based student-loan repayment program. In a notice to be published in Wednesday’s Federal Register, the department specifies that a panel of negotiators will meet in February 2015 for as many as three sessions.

President Obama announced plans in June to extend the Pay as You Earn benefit to people with older loans. The program caps participants’…

The U.S. Department of Education on Friday announced it had renegotiated its contracts with federal student-loan servicers, giving them more incentives to keep borrowers from defaulting on their loans.

President Obama announced plans to renegotiate the contracts in June, but Friday’s announcement provides more detail. For example, customer-satisfaction surveys will now play a larger role in how the servicers are evaluated, according to a statement from the department.

Adjunct professors would become eligible for a federal student-loan-forgiveness plan available to public servants under the terms of a bill introduced on Thursday by Sen. Richard A. Durbin, an Illinois Democrat.

The Public Service Loan Forgiveness Program allows employees of nonprofit organizations—including full-time professors at public universities—to have their federal student loans forgiven after making 120 payments while working in that capacity. Eligibility for the program would be ex…